NATIXIS - 2018 Registration document and annual financial report

5 FINANCIAL DATA

Consolidated financial statements and notes

the technical provision for insurance commitments was discounted. At December 31, 2018, as the transaction had not been completed, it was no longer classified under IFRS 5. At December 31, 2018, the components (related assets and liabilities) of the EuroTitres business line held for sale in connection with the plan to sell assets presented in Note 3.6, were recorded in accordance with IFRS 5 in two separate lines of the consolidated balance sheet: “Non-current assets held for sale” and “Liabilities associated with non-current assets held for sale”. A discontinued operation is a clearly identifiable component of an entity that either has been disposed of, or is classified as held for sale, and: represents a separate major line of business or geographic a area of operations; is part of a single coordinated plan to dispose of a separate a major line of business or geographic area of operations; or is a subsidiary acquired exclusively with a view to resale. a Assets and liabilities relating to discontinued operations are accounted for in the balance sheet in the same way as groups of assets held for sale. Gains or losses from these operations are presented on a separate line of the income statement and include the post-tax gain or loss resulting from operations discontinued before disposal and from the sale or valuation of assets or groups of assets held for sale at fair value less selling costs. These are financial liabilities held for trading (including derivatives) or classified in this category on a voluntary basis at initial recognition using the fair value option available under IFRS 9. Cash guarantee deposits and margin calls with collateral status set up in connection with repurchase agreements and derivative transactions recognized in instruments at fair value through profit or loss are also included in financial liabilities held for trading, as they are closely linked to the activities or instruments that they cover and are an integral part of the business model of the activity to which they relate. Securities valued under this irrevocable option fall into one of the following three categories: instruments that are part of a group of financial assets a measured and managed at fair value: the option applies to liabilities managed and measured at fair value, provided the management follows a fair value risk management policy; instruments showing an accounting mismatch with a related a financial asset/liability: applying the option enables the elimination of accounting mismatches stemming from the application of different valuation rules to instruments managed under a single strategy; hybrid instruments with one or more significant, separable a embedded derivatives: an embedded derivative is the component of a financial or non-financial hybrid instrument that qualifies as a derivative. The option allows the entire instrument to be measured at fair value, and therefore avoids the need to extract, recognize or separately measure the embedded derivative. Financial liabilities at fair value 6.10 through profit or loss

Scrapping or discontinuation of fixed assets under construction The expense incurred from the scrapping of a fixed asset is booked to “Depreciation, amortization and impairment of property, plant and equipment and intangible assets” on the consolidated income statement. The discontinuation of IT projects under development results in their derecognition. A corresponding expense is posted to “Gains or losses on property, plant and equipment and intangible assets” on the consolidated income statement. Non-current assets held for sale and 6.9 discontinued operations A non-current asset (or group of assets) is meant to be disposed of when its carrying amount is recovered by means of a sale. This asset (or group of assets) must be immediately available for the sale, and it must be highly likely that the sale will happen within twelve months. A sale is highly likely if: a plan to sell the asset (or group of assets) involving active a marketing is made by management; a non-binding offer has been submitted by at least one a potential buyer; it is unlikely that significant changes will be made to the plan or a that it will be withdrawn. The relevant assets are classified in the “Non-current assets held for sale” line item and cease to be amortized as soon as they are reclassified. An impairment loss is recognized if their carrying amount is higher than their fair value less selling costs. Associated liabilities are also identified on a separate line of the balance sheet. A group held for sale may be a group of CGUs, a CGU or part of a CGU. The Group may include the entity’s assets and liabilities, including current assets, current liabilities and assets that are outside the scope of the measurement provisions under IFRS 5. If a non-current asset within the scope of the measurement provisions under IFRS 5 is part of a group held for sale, the measurement provisions under IFRS 5 apply to the Group as a whole, which means that the Group is measured at the lower of its carrying amount or its fair value net of selling costs. If the sale has not taken place within twelve months of classification in “Non-current assets held for sale”, the asset or group of assets ceases to be classified in this category, barring special circumstances independent of Natixis’ control. The subsidiaries for which Natixis has committed to a plan to sell assets are listed in Note 3.6 “Subsidiaries held for sale”. At December 31, 2016, Natixis had entered into a sale agreement relating to one of its life insurance portfolios and securities representing these commitments. The completion of this sale was subject to approval by the ACPR (French Prudential Supervisory Authority). Securities representing insurance commitments initially recognized as “Available-for-sale financial assets” and “Financial assets and liabilities under the fair value through profit or loss option” were reclassified as “Non-current assets held for sale”. In accordance with IFRS 5, the reclassified securities were valued according to the provisions of IAS 39 and

288

Natixis Registration Document 2018